Running Multiple Retail Locations: 7 Practical Tips to Do It Right

Congrats! Things are going great in your business. Your retail store is booming, you’re seeing a rising demand for your products in different cities, and your company is generating enough cash flow, opening up plenty of possibilities for growth. You’re now considering expanding to a second location to take your business to the next level. But how exactly should you go about the process?

To help you answer that question, below are some pointers on how to expand your retail store. In the succeeding paragraphs, we’ll talk about what you need to consider before expanding, how to do it right, and how to ensure that things run smoothly across your different locations.

Make sure that your first store can run smoothly without you

Mike Winn, an Oil & Vinegar franchisee in Arizona, says that before venturing to other locations, retailers must see to it that their first store can run smoothly without their constant presence. “Make sure your first location is totally self-sufficient and can operate without your daily input before proceeding with a second location,” he advises.

Setting up a new store will take up most, if not all, of your time, so your first store should be like a well-oiled machine that can function without you. One way of accomplishing this is by having the right people in place. See to it that your manager has sufficient knowledge and experience to run the location on his or her own and your employees are competent enough to do well, even without your presence.

Use your knowledge from establishing your first store, but don’t fully depend on it

It’s important to note that setting up a second store is much like starting a new business from the ground up. While you may have some general retail knowledge from your previous location, a lot of the finer details can vary from one location to the next.

For instance, if you’re setting up shop in a different state, you will likely face different laws, tax regulations, and weather conditions. Even if you’re just planning to open a new store in a nearby street or a neighboring town, you’ll still be dealing with different zoning issues, competitors, etc. The point is you need to treat your second location as a new business, because in a lot of ways it is.

Here’s a rundown of things you should consider when establishing a new store:

1. Finances – How will you fund your expansion? Will you tap into your current cash flow or take on a loan or investment? Determine how you’re going to finance your new store, and figure out how that will impact your existing location.

2. Market and competitors – Conduct thorough market research for your new location. Get the demographic and psychographic info on the people living there, and be sure to scout the competition. Taking these steps will give you insights that will help you in carrying out your new store’s marketing plan, product mix, and launch.

3. Laws and regulations – You’ll likely have to comply with different laws and regulations when you set up shop in a different city or state, so get yourself up to speed when it comes to the location’s requirements. If you’re hiring a professional (say an accountant or attorney), see to it that they’re licensed in the state that you’re going to do business in.

4. Staffing – It might be a good idea to handle tasks like hiring and store management yourself, at least for the first couple of months. As Mark Loos, consultant at Consulting Services Methodology told Inc.com, “It’s more beneficial for [the owner] to be at the new location because you want to start to identify what the challenges are early on, and if he can spot those, then he can take action to correct those.”

However, this decision also depends on “whether or not you need to have local knowledge.” Inc.com points out that “if the business would benefit from someone who knows the area, the owner might consider handing off managing duties to a hire from within the new region.”

Make the most of existing vendor relationships, whenever possible

If you’re using the same vendors in your second location, see if you can get discounts or more favorable contracts. For instance, you could score lower rates from your insurance company if you choose to insure your second location through them.

Also remember that having an additional location increases your buying power. Since you’re purchasing for multiple locations, vendors are more likely to pay attention and cater to your requests. Be sure to leverage your buying power to negotiate better deals with suppliers.

Already got your new store up and running? Below are some pointers to keep your multi-store business functioning smoothly.

Run your business in the cloud

If you haven’t done so yet, replace your on-premises software and manual systems with cloud-based solutions. Doing so will save a ton of time and headaches (as we all know, running multiple locations is time- and energy-consuming enough as it is).

Having all your data in the cloud essentially lets you run your business from anywhere. For instance, Vend’s cloud-based software lets you perform various tasks—such as checking inventory, monitoring sales, and viewing customer data—from multiple devices and locations. You can, for example, be in store #1 and check store #2’s sales. Or, you can be in your home office and still track how all your stores are doing.

This not only makes it easier for you to run your business, it also makes life simpler for the rest of your staff. Most cloud-based solutions are built with multiple users in mind and thus offer features that aid sharing and collaboration.

In addition, your data is safer in the cloud because it isn’t tied down to a single device. So if (knock on wood) store #1’s computer suddenly breaks down, you won’t have to worry about losing any information.

Establish standard operating procedures

While each store should have a local flavor to it, you need to establish consistency when it comes to the policies and general experience you want your customers to have. Your procedure for processing returns and exchanges, for example, should be the same in all of your locations. This will not only reduce confusion internally, but it will also allow you to serve customers better and more efficiently.

As Robert Lerose wrote on BofA’s small biz community, “Putting some standard operating procedures in place can result in a consistent, streamlined organization that delivers the same efficient response at each location.”

Regularly check in with stores

Clear and regular communication is essential when you’re overseeing multiple locations. If possible, conduct weekly meetings with your managers so you can all update each other on how each location is doing. Winn states that it helps to have “organized scheduled communications with checklists of items to be covered.” This will ensure that you tackle everything you need and accomplish your meeting objectives without wasting too much time.

Have a third party evaluate your new store

A good way to get objective insights into your second location is to have a secret shopper scope out the store. Have them come in and evaluate the shop in terms of customer service, in-store experience, and consistency with your first location, then report back to you so you can figure out if anything needs to be improved.

Over to you

Do you have any other pointers for retailers who are considering setting up a new location? Let us know in the comments.

Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.

5 Comments - Add Comment

It will be appreciated if we can have an example more illustrative to show which processes and procedures could be cloud based and which are managed and stred internally. It will be a more useful disscution to be started.

Thanks for the feedback, Mahmoud. I’ll be sure to add more examples in future posts.

To briefly address you comment, when running multiple stores, it would be very beneficial to run processes such as checkout, inventory management, customer relationship management, and HR in the cloud. Like I said in the post, this would enable users to access and manage the information from multiple devices and locations.

Also note that you could still conduct processes/procedures internally while doing business in the cloud. Cloud apps (the good ones anyway) go to great lengths to safeguard data.

What information to store in the cloud and what to keep offline will also depend on each business. Retailers must use their judgement and identify what information, documents, or processes should be kept offline, and do so accordingly.

I looked and read every word but did not find what we consider the most important factor when you begin the journey to multiply your business. We agree that first step is to have your first store running without you, that is common sense. And, make absolutely sure that your brand is visible and associated with what you are in business for. The Brand is the core staple that holds your future chain of stores together, why; because each time a shopper visits your store and is satisfied they remember the brand and will return for more experience. Those same shoppers may change addresses and continue shopping with you and they communicate with others .

You raised a very important point. In addition to establishing consistency when it comes to the customer experience and store procedures (which the post touches on), retailers must also ensure that their brand shines through across all their stores. Retailers that do this well, will be able to connect more effectively with customers, and like you said, those shoppers will keep coming back and even tell their friends.

Thanks for the comment–you’ve given me a few ideas of what to cover in the future. 🙂

Hi Francesca,
Thank you for your response. Thank you also for agreeing with and using my comment and applying it to your future statements
Just a thought? you could also look at my little e-books, especially the one on Retail Stores where I cover many of the “drivers” in retail behaviour. http://www.retailplan.info